AIBU to consider putting all my savings into premium bonds?

[sheshootssheimplores]

I used to have premium bonds and would occasionally win £25. Then the recession hit and lots of people decided to put their savings into PB and the likelihood of winning was massively reduced.

I cashed them in and put some in a savings account and some into ISAs. Now the interest rate is so chronically low and every year it goes down some more that I’m wondering if I should just put them back into premium bonds. M

I have around 20k. My other choice is to tie it up for five years or so but that does worry me a bit incase I need to access the cash 🤔

Premium bond returns are still crap on the whole. Total luck if you “win” more than 1.5% a year.

I always used to think there was always a chance to win big. I don’t do anything else like the lottery or scratch cards. I’ve got this crazy idea that just maybe I could get lucky 🥴

My DM has the full £50 000 holding and wins £25-£75 every month. I win £25 every few months with £11 000 holding. I think it is a pretty good investment and great if you need access to the money quickly.

Ooooh that sounds more like it!

I've no clue but have been reading up on low-cost index funds. Maybe have a look at Martin Lewis's site?

YANBU
I did this - have nearly £40k sat in there while I’m looking for a property to invest in. Win £50 - £75 every month and I’m convinced I’m going to win the million one of these days

Great idea to look on moneysavingexpert. Didn’t even think of that! 🤔

I've got some premium bonds and some money in an instant access savings account (saving for a house), The premium bonds are far and away better than the low interest earning account.

But if I could tie the money up for years, I'd probably go for a higher rate of interest account and guaranteed increase of money. PBs are a bit random.

Ethelfleda have you looked into Lifetime isas great for first time buyers. Put in up to £4000 a year and the government give you 25% so a potential of an extra £1000 a year. Downside is you can only take it out to either purchase your first house or after your 60th birthday.

Martin Lewis was very damning about the likely return from premium bonds, the last time I read him!

I’m sure the return is rubbish...but the fun and little lift you get each time you get the email almost makes it worth it 😁

My DM has the full £50 000 holding and wins £25-£75 every month.

Even assuming £75 every month, that's 1.8% per annum. That isn't great really.

OP, I'd consider putting some in a peer to peer lending scheme, some in a shares isa and some in a cash isa.

We have our savings in there, partly because we aren't quite sure what we are doing with them yet so don't want to tie them up for any length of time and partly because it's fun to check the results every month.

I have max holdings and did win £175 one month which was nice. My mum won £500 last month! But if you want the best rates and don't mind locking your money away for a while, there are better options (but not as fun )

I've got £10k in PBs. I won £350 in the first year and am up to £250 this year with nearly 4 months to go.

Maybe you could think about diversifying your investments, depending on your attitude to risk and the likelihood you'll need to access the funds immediately. In addition to premium bonds, maybe think about putting a portion of your savings into a stocks and shares isa and a fixed term saving account. The lifetime isa has a fantastic return if you're thinking about about buying a house or your retirement.

Martin Lewis has a predictor thingy where you put in how much you want to invest and using stats it tells you how mich you'd get back.

I read up on these on MSE and it seemed like you would get a return on them that's slightly lower than in an alternative (might have been savings, but probably an ISA)

We have £70,000 between us split equally and have won just under £4k over the last year.
It's money we needed to have easy access to and we were happy to make nothing on so we were comfortable with taking a punt.

I've got 5k in there and rarely win anything. DD on the other hand has about £300 and wins £25 quite frequently- twice in the same day on one occasion!

I just got an instant access account from Goldman Sachs called Marcus (stupid name for a bank account) with a good rate. Aldermore have good fixed term rates just now if you are prepared to commit for a couple of years. You could split across the 2?

I could definitely fix for a couple of years. Like a PP said, there’s something fun about the hope that comes with PB. Like just maybe you’ll win the big one. I used to get the envelope through the door and I was always like ‘ooooooooooh’.

Then the recession hit and lots of people decided to put their savings into PB and the likelihood of winning was massively reduced. Premium Bonds don't work like that. They put a certain percentage into prize money - currently 1.4% - so more people increases the amount of prize money available. The only thing that affects your chance of winning is if they decide on a different distribution of prize values.

I win £25 every few months with £11 000 holding. You should be getting £25 every 2 months to match the 1.4% potential interest rate (ie the percentage of income that is redistributed as prizes). But of course it's not a guaranteed 1.4% - you might get more, you might get less.

I wouldn't take money out of an ISA, because once you've done that, you can't put it back again except as part of your annual ISA allowance - although the tax-free interest on an ISA is less important now the first £1000 of your savings interest is tax free anyway.

If your easy access money is in an account paying only 0.5% it might be amusing to transfer it into PBs - simply exchanging a guaranteed low interest with an expected but not guaranteed less low interest. But as peoplea re suggesting, there are probably better options.

How about puttting half in a stocks and shares ISA? A mixed, ready made fund of a range of shares and bonds, such as Vanguard Lifestategy.
If you get it from iweb it has very low fees, doesn't need you to look after it and returns are a lot higher than banks'.

It doesnt make any real sense with the average return as it is but there is always that possibility......

There are decent rates for small amounts out there. Couple of 5% rates, usually through current accounts. MSE has a page. You won't be able to put all your savings in at those rates but I'd use up the accounts paying more than 1.4% then put some in premium bonds if you fancy that.